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Wednesday, 6 June 2001
Page: 27383


Mr RIPOLL (1:18 PM) —It is with great pleasure that I rise to speak on the Export Market Development Grants Amendment Bill 2001. It is a great pleasure because, as with most bills, there is some great change but also positive change and it is good change for business and exports. It is also good for Australia generally. There is no doubt that Australia relies heavily on export markets for revenue and for jobs locally. No-one could deny the fact that a great deal of money is spent on the EMDG Scheme, but it is money that I believe is very well spent. The bill makes a number of changes to improve the scheme, and also to extend it as a result of the recommendations that were put forward by the review board. The scheme would have ended in July 2001. The bill seeks to extend the scheme by five years—to 2005-06—with another review mechanism in the future.

The further extension of the scheme for five years is probably the most important part of this legislation. In my consultations and discussions with exporters, I know that this was of great concern to them. There was a whole range of uncertainty about whether the scheme would continue into the future or just cease to operate. I know the government made some blurred attempts last year to give some confidence to business in terms of the scheme being continued, but it certainly has been some time in its coming. However, it is much appreciated now that it is here.

The legislation also takes into account the minimum expenditure threshold and reduces it from the $20,000 to the $15,000 required to access the scheme to begin with. This is a good move because it recognises that some smaller businesses in particular may not be able to reach that initial $20,000 as easily as they would the $15,000. It is a positive move. Reducing the period that related family members need to be employed in a business before they can access travel expenses and be eligible under the scheme from five years to one year is again a welcome move and will further broaden the ability of Australian exporters to be able to do their bit and access foreign markets.

The bill also removes the requirement that intending first-time claimants must register with Austrade before they can apply for a grant. Again, this is just a simplification. It makes it easier for people to apply. In the climate which other speakers have mentioned—and I will do so—there are not that many exporters, I believe, that actually know what is available to them through Austrade or this scheme, particularly people who may not yet be exporters but have a potential to export. Not only are the changes contained in this bill good and worthy but also there needs to be a focus on giving business with the potential to export more information so they can access this very good scheme.

The bill also removes the requirement that marketing consultancies must be short term to qualify. It also broadens the expense category related to trade fairs. All these things are positive and worth while, and they are certainly supported by this side of the House.

I will move on to the eligibility criteria. To be eligible for this grant, you must make your goods here in Australia and have at least 50 per cent Australian content. If you do have goods that are partly made outside of Australia, at least 75 per cent of their components must have Australian content of 50 per cent or more. So this scheme does put in place eligibility requirements to ensure that it is not abused but is used by Australian manufacturers and service providers to be able to go out and seek markets other than local markets.

There is also a requirement that the services delivered be delivered outside Australia—otherwise it would not be an export grant—or, if within Australia, only to non-residents and inbound tourism services which are related to export services. There is a requirement that the trademarks are owned and that there is know-how resulting from substantial research or work performed in Australia. There are a number of similar eligibility requirements, which mean that only those who are going to use the money for its intended purpose—that is, to give businesses the crucial assistance they need to be able to go into difficult markets overseas and establish a presence to market themselves to be able to make a go of things—receive that money. I think that that in itself is quite good.

In my electorate, a number of local firms use this scheme and the grants it provides. When I got the Austrade document with the list of grant recipients for the financial year 1999-2000, I was quite surprised to find that there were 21 recipients in Oxley, my federal seat. I did not see my neck of the woods as being an electorate which was heavily oriented to the export market. We certainly are an industrialised area with many small and large businesses, but the sheer number of them, the number of grants they have received and the different types of business they are in, surprised me. I want to go through a number of them. Tourism, for example, in Ipswich has received some grant money. Textiles, paint and other building supplies companies have received grants. There is also agriculture, which one might associate more generally with export markets. But certainly the trend in Australia of exporting has changed greatly, and it is no longer based purely on exporting the wool off the sheep's back. A whole range of industries, from tourism to sport to services, really bring home the revenue for Australians and provide the jobs. Such things as chemicals from Dinmore, clothing, furniture, jewellery, sporting goods and industrial medical machinery have received quite substantial grants. The list goes on, covering a whole range of different products, goods and services.

One in particular that I know of personally and have had consultations with is a brick and paver manufacturer called Claypave in my electorate. When you mention a brick and paver manufacturer, most people might wonder what such an enterprise would be doing trying to export goods. You would expect that their market would be a local market, a domestic market, an industrial market, including the housing industry, commercial projects and that sort of thing, affected locally by transport costs and a range of other factors which might limit their business to a particular area. Much to my surprise—and I am sure to a lot of people's surprise—this company making bricks and pavers relies heavily on export markets for its growth and for its potential to employ people. This company has been exporting for quite a number of years and has made extensive use of the EMDG Scheme and is very happy with the scheme, although it believes that there are a number of bureaucratic processes in the scheme which probably could be streamlined and that the scheme is perhaps a little bit too narrow.

As I said earlier, there was certainly a lot of uncertainty about the continuation of this scheme. One of the points that the minister could take note of is that maybe we need to move beyond the temporary nature of the extension and further review to a more permanent arrangement whereby we recognise that Australian exporters have a legitimate access to government assistance in order to be able to go and explore markets overseas, because in return these companies grow, their markets grow, they provide jobs, they pay taxes and they contribute to the economy.

In a moment I will go into some of the research that has been done about the sorts of benefits provided by these exports and the direct relationship between the dollars spent by the government and the return to the economy and what that provides locally. I want to raise a couple of further points about how the government should view this scheme. This is not a scheme that, in essence, costs money. While it costs money to implement it and to provide the grant, the return is much greater. According to the studies I have access to, the return is in the order of 12 to 1. For every $1 spent, there is a return of $12 in export revenues to this country, and that translates directly to jobs.

The way this should be looked at and approached by government is as a strategic partnership with those companies going overseas. They need assistance to be able to go into difficult markets, to be able to market themselves and to grow those markets. They do not need that just initially but continually. In my discussions with exporters, they have said to me that, even after many years in a particular market, you may come to realise that the area you have been pursuing has changed and that there is a new market which is opening up and developing which you want to go into. So it is a constantly changing field, and there needs to be enough flexibility in this scheme to be able to accommodate that and to be able to provide for these industries.

It is also the case that there has to be—and there is through this scheme, which is what makes it such a good scheme—a shared risk, shared with government. Some confidence is given to business that government will supply, through this grant, money for people to be able to go and promote their products, whether it be in Japan, South-East Asia, the Americas or wherever it might be. The shared risk element gives greater confidence to business that it is not standing alone. Not only do the people at Austrade do a very good job overseas in providing assistance, but this confidence about which exporters tell me results from sharing the risk, sharing the costs with government. So it is more than just the money itself—it is the confidence that is built into this scheme in saying, `Government will take a risk with you and provide you with not only some expertise but some dollars to back you up.' These are very important parts of the scheme.

The scheme itself, as was mentioned by a previous speaker, was set up by Labor in 1974 and has been moulded and changed over the years, particularly through the Hawke-Keating governments. This government has gone further and made a number of changes that were recommended in the board review. The government certainly should be commended on taking those changes forward. A number of recommendations were not taken on board. In particular, there was one about the cost of overseas buyers coming into Australia. This is something that the government should look at again and perhaps amend, to ensure that if buyers make the effort to come to Australia, perhaps sponsored by companies here, those companies can have access to the grant money in order to get those people here and to sell their products to them. You do not necessarily always have to travel overseas, although that is the most common way of doing it; maybe you can invite a buyer here. Once the market is through establishment phases, a substantial buyer might come to Australia, the company being supported in its efforts to promote that so that it can sell its products into overseas markets.

There is another important point to note. This government has had over 12 months to implement the recommendations of the report. Often the government has to be dragged kicking and screaming to do things. I will not quite say that it has been dragged kicking and screaming to bring forward these amendments, but it certainly has taken its time. We have heard other speakers talk about the government's record, Labor's record and so forth, but it is more important to say that everybody out there supports export market growth. Everyone understands and knows that there are many jobs tied to those export markets, and the critics of certain funds going out to those companies that try to expand those markets really need to have a good close look at where their employment perhaps comes from.

Again I will use an example from my electorate. Claypave is a brick and paver manufacturer which last month recorded production at two-thirds capacity purely for the export market, a market that that company has developed substantially because it has had access to the EMDG Scheme. It is quite important to understand that this local company, which employs 200 people and is in a labour intensive industry even though others in that industry have moved to more mechanised systems, finds that because of the quality control systems put in place by the company and its workers it is able to supply into very fickle markets, particularly the Japanese market, a high quality product which the local manufacturers cannot produce. This Australian product has a special quality to it; people in those export markets certainly cannot get such pavers and bricks locally. That product illustrates the great potential.

Some quick sums would show that two-thirds of production last month being purely for export overseas translates to a lot of jobs. Even if we were just to say it translated to half the jobs involved, that would account for 100 jobs in my electorate. As many would know, in this current unemployment climate 100 jobs are very hard to come by—100 good, solid, full-time jobs, not casual or contract jobs but real jobs. They are long-term, real jobs that have a future, real jobs that pay superannuation and give people confidence that they will be employed for quite some time. So the importance of the EMDG Scheme cannot be overstated.

I have to put it on the record, though, that as of this year the real level of funding, the level that counts, is down by approximately 37 per cent on 1996-97. There has been a substantial reduction. And this comes at a time when the conditions for export are probably at their best. We have a low dollar, we have the capacity and we have an interest in Australian goods, products and services. There are people wanting our products. Our low dollar has created part of that interest and also causes the export markets to be in our favour. While we have this positive business environment, we have seen a reduction in the real funding of the scheme. While exports and revenue to Australia have gone up, I believe they would have gone up substantially more had more money been poured into this scheme. I urge the government to take another look at the funding of this scheme. This is not money wasted; it is an investment in jobs. The money that goes into this scheme is an investment in the export future of many companies in Australia.

I was surprised and happy to find that in my electorate I have 21 such companies, and I will be writing to inform them of the changes and also to encourage them to talk to other businesses and to expand what they do. It is unfortunate that we have seen not only a reduction in the real funding to this important scheme but also a reduction in the number of claimants. Currently about 3,000 people access the scheme. It is worth about $150 million, which in real terms for the government is not a lot of money but money very well spent. While exporting continues to grow, perhaps this is the right time to promote it. People in those industries are quick to say that what the government should do in these cases is to get on with what works well. If something is working well, we should get that done, putting more money into that, focusing on the good bits—and right now the good bits are exports. The things that are working well are export markets. Maybe there should be a concentration of policy on expanding those export markets and providing a better economic environment for Australian companies to go overseas and do that.

I want to spend a brief moment looking at some of the problems, not necessarily in this scheme, that are faced by exporters. Often we hear, as we did earlier from one of the government members, that exports might be a bit better if the wharves were a bit better. I queried this and looked at it. To my surprise, it had nothing do with the number of workers on wharves, nor with efficiency or productivity rates. The biggest complaint that I get and the one that seems to be the most obvious is that, with a boom in exports, there are actually more containers on the wharves and there are not enough ships. It is a simple case of not enough ships, and of the cost of transport. The cost was not as bad an issue; in fact, the cost was seen to be just part of the process and okay. But certainly the number of ships was a problem.

Ships are coming up from Melbourne to Sydney and loading up on the way. By the time they get to Brisbane they are either already full and containers then sit on the wharves because there are no ships to pick up the containers or, in the case of the bricks and pavers being exported—the example I used—they are very heavy items. A container of bricks and pavers is going to weigh a fair bit; I believe around 20 tonnes. So if the ship is already loaded they are not going to have 20 tonnes perched up on the top in a precarious position. They would prefer it if the 20 tonnes were down in the hull somewhere, nice and low, used as ballast. There are a range of problems with getting the transport right, but I think it is just a case of getting the numbers right in terms of transport. Perhaps this reignites the debate that is always going on about the Australian shipping industry. Maybe we could do more for our exporters by strengthening the provisions in the EMDG Scheme, and also looking at better transport and better access to the markets through an Australian shipping industry. I congratulate the government on this scheme, but I do highlight some of the inherent problems. (Time expired)